basic promotion 2011[1]

Updated upto 12.06.2011
Personal Question 1. Self Introduction 2. Do you deserve promotion? Why? 3. Some questions form academic backround. !. D"I##$full form% Diplomaed "ssociates of Institute of #ankers #anladesh &. 'our duty
Know BASIC Bank 1. Name of MD:(a)i *akrul Islam +Incomin, previously -D of #*/0 2. Name of AMD:-r. Sk. -on)ur-orshed +//0 3. Name of DMDs :
Name Division -r. *a)lusSobhan uman esources Division

4rade *inance Division *inance "ccounts Division 7eal Division esearch Development Division /onsumer *inance Division
-r. (anak (umar 8urkayastha
/ommercial /redit Division I/4 Division #ack 9:ice Division /ard Division
-r. -d. Shahabad Do)a Industrial /redit Division -IS Division #ranch /ontrol -arketin Division /redit "dministration Division /apital -arket Services Division
!. Name of Chairman :Mr. Sheikh Abul !"eBa##hu, /hairman, #"SI/ #ank 7imited.
&. Name of Dire#tors : i. Mr. $ahan%ir AkhanSalim& *ounder 8resident /handpur /hamber
of /ommerce and Industries ii. Mr. Shubhashish Bose& ;oint Secretary, *inance Division, -inistry of
*inance iii. Ms. Neelufar Ahme& D5, 8rime -inister<s 9:ice, Dhaka iv. Mr. Shakhawat!ossain& *ormer /ommissioner of /ustoms v. Prof. Dr. Ka'iAkhtar!ussain& /hairman Department of "ccountin
and Information Systems Islami =niversity, (ushtia vi. Mr. (akhrul Islam& /hairman, #S/I/, Dhaka vii. Mr. M. Anwarul Islam& (CMA& -anain Director, "S 7ube
#anladesh 7td. >. Name of Com)an" Se#retar" % -r. -d. Shah "lam#huiyan . Name of *Ms:
Name Division -r. "bdul @ayum -ohammad (ibriya
-icro /redit Special *inance Division -IS Division stablishment Division esearch Development Division Small nterprise *inance Division
-r. Shahadatossain 4rade *inance Division 7eal Division *inance "ccounts Division I/4 Division 4reasury Division
-r. -ohammad Wahidul"lam "udit Inspection Division "udit *indins -onitorin Division /ompliance Division
-r. (handakarShamim asan Industrial /redit Division #r. /ontrol and -arketin Division ecovery Division /onsumer *inance Division
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-r. -d. -o)ammelossain In /hare, "rabad #ranch
-r. ". -onaem (han uman esource Division /ommercial /redit Division /ard Division
B. +h" BASIC Bank is uni,ue -Manate. #"SI/ #ank 7td is unique in its ob6ectives. It is a blend of development and commercial bankin functions. 4he -emorandum and "rticles of "ssociation of the bank stipulate that &C percent of loanable funds shall be invested in small and cottae industries sector. 4hus the banks priority remains Eith promotin and Fnancin development of small$scale industries in the country.
G. Date of In#or)oration % "uust 2, 1GBB 1C.Date of Commer#ial o)eration % ;anuary 21, 1GBG 11.(ormation of BASIC Bank
4he #"SI/ #ank 7imited +#anladesh Small Industries and /ommerce #ank 7imited0 established as a bankin company under the /ompanies "ct 1G13 launched its operation in 1GBG. It is overned by the #ankin /ompanies "ct 1GG1. 4he #ank started as a 6oint venture enterprise of the #// *oundation Eith C percent shares and the 5overnment of #anladesh Eith 3C percent shares. 4he #// *oundation bein nonfunctional folloEin the closure of the #//I, the 5overnment of #anladesh took over 1CC percent oEnership of the #ank on !th ;une 1GG2.
12.No. of em)lo"ee : 13./0ternal 1atin%s of Bank B" C1IS2 -Short term 3 2on% term
atin year$2CCG 7on term$"" +in the lon term are ad6uded to be of hih quality, o:er hiher safety and have hih credit quality. 4his level of ratin indicates a corporate entity Eith a sound credit proFle and Eithout siniFcant problems. isks are modest and may vary slihtly from time to time because of economic conditions.0 Short 4erm$S4$1 +in the short term are considered as the hihest certainty of timely payment. Short$term liquidity includin internal fund eneration is very stron and access to alternative sources of funds is outstandin. Safety is almost like risk free 5overnment short$term obliations.0
1!.CAM/2S 1atin% b" Ban%laesh Bank % A4 as on 5676879668
(inan#ial Info of BASIC Bank 1&. Authori'e Ca)ital :4k 2CC.CC crore as on 31.12.2C1C 1>.Pai u) Ca)ital :4k1G>.CCcrore as on 31.12.2C1C 1.otal Ca)ital : 4k.&C.CC crore as on 31.12.2C1C 1B.Ca)ital Ae,ua#" 1atio :G.!1H as on 31.12.2C1C 1G.Creit De)osit 1atio: G!.CBH 2C.Classi;e 2oan: !.B3H as on 31.12.2C1C 21.Cost of De)osit: 22.Cost of (un:B.13H as on 31.12.2C1C 23.Interest S)rea: 2!.C11 : >.CH as on 31.12.2C1C +required >H &H of "verae Demand
4ime 7iabilities0 2&.S21 : 1&.21H as on 31.12.2C1C +required 13H of "verae Demand 4ime
7iabilities0 2>.otal C11 3 S21 : 21.2BH as on 31.12.2C1C +required 1GH of "verae
Demand 4ime 7iabilities0 2.No. of Bran#hes : 3!
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2B.ar%et vis<=<vis A#tual +"mount in crore 4aka0
ar%et 96>6
A#hieve 96>6
!&CC !BB1 >&CC
Avan# e
!CCC !>3! &&CC
Im)ort !CCC !221 &2CC /0)ort 3CCC 2!CC 3&CC Pro;t 2CC 21& 2>&
2G.Divien for 96>6 : 96? Sto#k
GENERAL BANKING
>. Di@eren#e between Pvt. 2t. an Publi# 2t. Private 2t. Co. Publi# 2t. Co.
C1
Incase of 8rivate 7imited /o. minimum shareholder Eill be 2+tEo0 and maimum shareholder Eill be &C+Ffty0.
C1
Incase of 8ublic 7imited /o. minimum shareholder Eill be +seven0 and maimum Eill be unlimited or limited by share of the company.
C2 /ertiFcate of the commencement of business is not required.
C2 /ertiFcate of the commencement of business is must to startin business.
C3
8rospectus can not be published to the public for share sales and share cannot be transferred to the public.
C3
8rospectus must be published the Daily JeEspaper to the public for share sales and share must be transferred.
C! "nnual 5eneral -eetin is not required.
C! "nnual 5eneral -eetin is a must on or before 1& months of the last "5-.
C& "udit eport not to submit to the eister of the /ompany.
C& "udit eport must be submitted to the eister of the company.
9. Can minor o)en an" a##ount -ri%hts an reservation 'es minor can open account but as per contract act 1B2, a minor en6oys some privilees such as heKshe cannot be liable for any Eron doins. So, banker should take etra care in openin and operatin of minor accounts, i. Jatural uardian or 5uardian appointed by the court should operate the
account. In this manner 6oint account can also be opened. ii. 4he account can be opened and operated by them Ehere the minor has
attained the ae of 12 years. iii. /urrent account should not be opened in the name of minors. iv. /hequesKbills should not be collected v. #ank should keep the recode of minors birth date and after attainin
ma6ority uardian should not be alloEed to operate the account and bank
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should request the minor to open a fresh account before a third party Eitness.
vi. If uardian dies before attainin ma6ority then bank should ive the money to court appointed uardian or to him after attainin ma6ority.
vii. -inor can draE endorse or neotiate any chq but there Eill be no liability of minor.
viii. Jo 9D facility is alloEed to these accounts
5. Di@eren#e between DD 3 P DD and 89 both is remittance instrument issued by bank. 4he main di:erence is, in case of 89, it is issued to remit money Eithin the station and payment is made by the issuin branch. 9n the other hand DD issued by one branch of the bank Eith a advice issued on other branch to pay the money and it is issued Ehen outstation remittance is required.
. Di@eren#e between Bankers Ch, 3 Customer Ch,. #ankers cheques are those cheques issued by bank like DD, 89 and customer chq are chqs issued aainst their account maintained Eith the #ank. If all other thins are ok then main di:erence is that, a customer chq can be dishonored for insu:icient of fund Ehich is not possible for #ankers chq.
. *arnishee rer Its an order by the court of laE to suspend the transaction in any customer account or to disclose the information to the court or to any particular authority of any customer account. 4he 5arnishee 9rder has tEo forms% 1. 9rder Jisi +"sk for free)e the account, ii. "sk eplanation Ehy funds not for payment of 6udment creditor0, 2. 9rder "bsolute% /ourt directs to pay either Ehole or part of deposit aainst Ehich 9rder Jisi issued.
8. Ne%otiable Instrument 3 Its Chara#teristi#s Jeotiable Instrument are those instrument Ehich is declared neotiable as per Jeotiable Instrument act$1BB1, as per the act #ill of chane, 8romissory Jote and /hqs are neotiable instrument. Characteristics: i. -ust be Eritten and sined ii. asy to transfer iii. 4ransfer free from defects% transferor Eith bad title can pass ood title iv. iht to sue v. Jo notice to transfer vi. Delivery ssential vii. /redit of the 8arty
E. Di@eren#e between Bearer& rer 3 Not Ne%otiable #earer chq can be paid to anybody. In case of order chq it should be paid to a certain person and it can be neotiated by endorsement. Jot Jeotiable chq is neotiable but it Eill not ive better title to the ultimate holder and #anker should take etra care for these types of chqs.
4. Pro#eure of ;lin% suit an )unishment on ishonor of #h,
DIS9J9= /@=S *9 IJS=**I/IJ/' 9* *=JD +8rovisions elatin cheque dishonour described in the sections 13B, 13B", 13G", 1!C and 1!1 of 4he Jeotiable Instruments "ct 1BB10 Sec%$ 13B0 Dishonor of cheque for insu:iciency , etc. of funds in the account%$ Where any cheque draEn by a person on an account mentioned by him Eith a banker for payment of any amount of money to another person from out that
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account LL is returned by the bank un paid , either because of the amount of money standin to the credit of that account is insu:icient to honour the cheque or that it eceed the amount arraned to be paid from that account by an areement made Eith that bank , such person shall be deemed to have committed an o:ense and shall Eithout pre6udice to any other provision of this act , be punished Eith imprisonment for term Ehich may etend to one year or Eith Fne Ehich may etend to trice the amount of the cheque or Eith both. 8rovided that nothin contend in this section shall apply unlessM +a0 4he cheque has been presented to the bank Eithin a period of si months
from the date on Ehich it is draEn or Eithin the period of its validity, Ehichever is earlier.
+b04he payee or the holder in due course of the cheque as the case may be makes demand for the payment of the said amount of money by ivin a notice in Eritin to the draEer of the cheque, Eithin thirty days of the receipt of information by him from the bank reardin the return of the cheque as unpaid and
+c0 4he draEer of such cheque fails to make the payment of the said amount of money to the payee of as the case may be to the holder in due course of the cheque Eithin thirty days of the receipt of the said notice.
1"0 4he notice required to be served under clause +b0 of sub$section +10 shall be serve in the folloEin manner,
a0 #y deliverin it to the person on Ehom it is to be served or
b0 #y sendin it by reistered post Eith acknoEledement due to that person at his usual or last knoEn place of above business of #anladesh.
c0 #y application in a daily banle national neEs paper havin Eide circulation.
20 Where any Fne is reali)ed under sub$section +10 any amount up to the face value of the cheque as far as is covered by the Fne reali)ed shall be paid to the holder.
30 Jot Eithstandin anythin contained in sub$section +10 and +20 the holder of the cheque shall retain his riht to establish his claim throuh civil court if Ehole or any part of the value of the cheque remains unreali)ed.
13B"0 estriction in respect of appeal%$Jot Eithstandin any thin contained in the code of criminal procedure 1GBG , no appeal aainst any order of sentence under sub$section $1 of section 13B shall lie unless an amount of not less then Ffty percent of the dishonored cheque is deposited before Fllin the /ourt Ehich aEarded the sentence.
Sec 1!C%$ 9:ence of companies%$ If the person committin an o:ence under section 13B is a company every person Eho at the time the o:ence is committed Eas in chare of and Eas responsible to the company shall be deemed to be uilty of the o:ence and shall be liable to be proceeded aainst and punished accordinly.
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8rovided that nothin contained in this sub$section shall render any person liable to punishment if he proves that the o:ence Eas committed Eithout his knoElede or that he had eercised all due deleate to prevent the commission of such o:ense.
+20 JotEithstandin anythin contained in sub$section +10 Ehere any o:ence under this act has been committed by a company and it is proved that the o:ence has been committed Eith the consent or connivance of or is attributable to any nelect on the part of any director, manaer, secretary or other o:icer of the company such director manaer, secretary or other o:icer shall also be deemed to be uilty of that o:ence and shall be liable to be proceeded aainst and punished accordinly. N87"J"4I9J %$ *or the purpose of this section
+a0 /ompany means any body corporate and includes a Frm or other association of individuals a Frm or other association of individuals, and
+b0 Director in relation to a Frm, means a partner in the Frm.
1!1. /oni)ance of o:ence%$ JotEithstandin anythin contained in the code of criminal procedure 1BGB
+a0 Jo court shall take coni)ance of any o:ence punishable under section 13B ecept upon a complaint in Eritin, made by the payee or as the case may be the holder in due course of the cheque.
+b0 Such complaint is made Eithin one month of the date on Ehich the cause of action arises under clause +c0 of the proviso to section 13B.
+c0 Jo court inferior to that of a /ourt of Session shall try any o:ence punishable under section 13B.
F. Bill of /0#han%e #ill of chane is an instrument in Eritin containin an unconditional order, sined by the maker directin a certain person to pay a certain sum of money payable on demand, or Fed, or future determinable time, only to , or to the order of a certain person or to the bearer of the instrument.
>6. 1ates of interest of i@erent a##ounts S#$ SJD$ *D$
>>. Di@erent Status of A##ounts: Dormant$> -onths, Inoperative$2 'ears, =nclaimed$1C 'ears
>9. Di@erent A#ts relate to *B a. 4he /ompanies "ct$1GG! b. 4he #ank /ompanies "ct$1GG1 c. 4he /ontract "ct$1B2 d. 4he *inancial Institution "ct$1GG3 e. 4he 8artnership "ct$1G32 f. 4he 4ransfer of 8roperty "ct$1BB2
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. 4he -oney 7oan /ourt "ct$2CC3 h. 4he -oney 7aunderin 8revention act$2CC2 i. 4he Jeotiable Instrument "ct$1BB1
>5. +hat is /sto))el: "n estoppel is a defense aainst a party renein on a previous statement assumed to be a leal truth. 9nce a statement of fact is entered into a court case, the person Eho made that statement must stand by its truthfulness. e or she cannot claim a neE position in a future business or private dealin. If the other party makes a decision based on the untruthful second statement and a laEsuit ensues, they can claim an estoppel in court aainst the plainti:. In order for the estoppel to be considered valid, hoEever, the defendant needs to demonstrate damaes stemmin from the untruthful statement. /sto))el is a leal doctrine reconised both at common laE and in equity in various forms. It is meant to complement the requirement of consideration in contract laE. In eneral it protects a party Eho Eould su:er detriment if% • 4he defendant has done or said somethin to induce an epectation • 4he plainti: relied +reasonably0 on the epectation... • ...and Eould su:er detriment if that epectation Eere false. =nconscionability by the defendant has been accepted as another element by courts, in an attempt to unify the many individual rules of estoppel.
>. Chara#teristi#s of SND: • days prior notice to be iven in case of EithdraEal of amount otherEise
interest Eill not be accrued for that month
• /heque Eill be issued
• Interest to be calculated on the basis of Day$end balance and accrued interest Eill be credit as alf$yearly or durin account closin
• Interest rate may be Fed accordin to ceilin of amount not customer$Eise or amount$Eise and Eill not eceed the rate of interest of eneral savins account.
• -inimum balance may be Fed but Jo minimum balance feeKincidental chareKleder feeKservice chare. #ut "ccount -aintenance *ee 4k.&CCKO half yearly, account closin fee 4k.3CCKO
Page 7 of 119
Credit >. ProGe#t a))raisal H as)e#ts& KC& KP& PP et#.
8ro6ect appraisal means pre$investment analysis of an investment pro6ect to determine its commercial and socio$economic feasibilities Ehile pro6ect evaluation shoEs the post investment achievement. "spects % 10 4echnical 20 -arketin 20 *inancial !0 conomic &0 Social environmental >0 -anaement competence
9. Prin#i)le of soun lenin% Safety, 7iquidity, 8urpose, 8roFtability, Security, Spread, Jational interest and sustainability.
5. 2oan )oli#" " policy ives loan o:icers and banks manaement speciFc uidelines in makin individual loan decisions and in shapin the banks loan portfolio. +contains 7endin authority, lines of responsibility, operatin procedure, required documentation, loan pricin, credit limit, etc.0
. /,uitable 3 1e%istere Mort%a%e In reistered mortae, the mortaor transfers to the mortaee the leal title to the property. 9n repayment of the loan the mortaee transfers the title to the mortaor. In case of an equitable mortae, the mortaor deposits the title deeds Eith the mortaee Eith the intention of ivin the mortaee an equitable interest in the property. It does not require reistration.
. SM/ nterprises shall be cateori)ed usin the folloEin deFnition +Fed investment implies eclusion of land and buildin, and valuation on the basis of current replacement cost only0% Small enterprise% an enterprise should be treated as small if, in todays market prices, the replacement cost of plant, machinery and other partsKcomponents, Ftures, support utility, and associated technical services by Eay of capitali)ed costs +of turn$key consultancy services, for eample0, etc, ecludin land and buildin, Eere to be up to 4k. 1& millionP -edium enterprise% an enterprise Eould be treated as medium if, in todays market prices, the replacement cost of plant, machinery, and other partsKcomponents, Ftures, support utility, and associated technical services +such as turn$key consultancy0, etc, ecludin land and buildin, Eere to be up to 4k. 1CC millionP
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*or non$manufacturin activities +such as tradin or other services0, the 4askforce deFnes% Small enterprise% an enterprise should be treated as small if it has less than 2& Eorkers, in full$time equivalentsP -edium enterprise% an enterprise Eould be treated as medium if it has betEeen 2& and 1CC employeesP
S/D(: Small% Fed capital investments Q 1CC,CCC 4k +1,&C =SD0 and R 1CC m4k +=SD 1.& million0 -edium% Fed capital investments 1CC to 3CC million 4k +=SD 1.&million $ &.2& million0 SD* 4aret% 4k 1C$3CC million +=SD 1&,CCC $ &.2& million0 in Fedcapital investments. Pro)ose e;nition of the *oB Small nterprise has less than &C employees and K or less than 1& m4k in *ied /apital Investment -edium nterprise has &1$GG employees and K or *ied /apital Investments betEeen 1.& and 1CC m 4aka BB 1e%ulations for Small /ntre)rises 8rivate entity Eith less than >C employees for the -anufacturin Sector 3C employees for the Service Sector 2C employees for the 4rade Sector 10Service Sector % 4otal "ssets +ecludin lands and buildins0 betEeen&C,CCC and 3 million 4k +BCC$&C,CCC =SD0 204 rad e Sector % 4otal "ssets +ecludin lands and buildins0 betEeen&C,CCC and & million 4k +BCC$BC,CCC =SD0 30 -anufuacturin Sector % 4otal "ssets +ecludin lands and buildins0betEeen &C,CCC and 1C million 4k +BCC$1>C,CCC =SD0 Banks: S#/ 4urnover R 2.& m=SD /itibank Jb employees R >C #"/ #ank 7oan si)e R 3 m4k "# #ank 7oan si)e R 1CC m4k De;nition of SM/s in Ban%laesh DoEnload this Document for *ree8rint-obile/ollectionseport Document SM/ Bankin% nterprises shall be cateori)ed usin the folloEin deFnition +Fed investment implies eclusion of land and buildin, and valuation on the basis of current replacement cost only0% Small enter)rise% an enterprise should be treated as small if, in todays market prices, the replacement cost of plant, machinery and other partsKcomponents, Ftures, support utility, and associated technical services by Eay of capitali)ed costs +of turn$key consultancy services, for eample0, etc, ecludin land and buildin, Eere to be up to 4k. 1& millionP Meium enter)rise: an enterprise Eould be treated as medium if, in todays market prices, the replacement cost of plant, machinery, and other partsKcomponents, Ftures, support utility, and associated technical services +such as turn$key consultancy0, etc, ecludin land and buildin, Eere to be up to 4k. 1CC millionP *or non<manufa#turin% activities +such as tradin or other services0, the 4askforce deFnes% Small enter)rise: an enterprise should be treated as small if it has less than 2& Eorkers, in full$time equivalentsP Meium enter)rise: an enterprise Eould be treated as medium if it has betEeen 2& and 1CC employeesP
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buildin0 -anpoEer
Service #D4&C.CC lac$1C.CC crore &C #usiness #D4&C.CC lac$1C.CC crore &C -anufacturin #D41.&C crore$2C.CC
crore 1&C
buildin0 -anpoEer
Service #D4&C,CCC$&C.CC lac 2& #usiness #D4&C,CCC$&C.CC lac 2& -anufacturin #D4&C,CCC$1.&C crore &C
F. Cotta%e inustr" /ottae industryT means an industry in Ehich members of a family are enaed part$time or full$time in production and service$oriented activities.
>6. S+ Anal"sis Internal % Strenth, Weakness ternal % 9pportunity, 4hreats +/hallenes0 Stren%ths 5ood asset quality, Satisfactory business roEth, 5ood proFtability, perienced top manaement, 5ood operatin e:iciency, quity base enhancement decision, Jo short fall in /apital "dequacy, Satisfactory J87 coverae, 8rofessional manaement team, Satisfactory risk manaement structure, -ulti product Fnancial institution, Stron distribution channel, Satisfactory I4 soft and hard infrastructure, "dequate capital base, Satisfactory liquidity position, -arket leader in Small -edium scale industry bankin amon the local banks, 5overnment oEnership +eaknesses Dependent on Fed deposits, -oderate risk manaement system, 7imited deleation of poEer, 7imited branch netEork, 8oor /orporate 5overnance, InsiniFcant market share, 7imited disclosure, /oncentrated oEnership, 7oE non$funded business ))ortunities #asel$II compliance for capital adequacy, /reation of brand imae, Dual currency credit card, S- and "ro based business, eal time online bankin, Scope of Ehole sale bankin Eith J#*Is, ousin Fnance hreats Increased competition in the market, -arket pressure for increasin the S7, Supply ap of forein currency
>>. C1*M -+ith 1isks • 4he /redit isk 5radin +/50 is a collective deFnition based on the pre$
speciFed scale and reUects the underlyin credit$risk for a iven eposure. • " /redit isk 5radin deploys a numberK alphabetK symbol as a primary
summary indicator of risks associated Eith a credit eposure. • /redit isk 5radin is the basic module for developin a /redit isk
-anaement system.
S#ore
1 Superior S=8 1CCH cash covered 5overnment uarantee International #ank uarantees
2 5ood 5D B&V 3 "cceptable "//84 &$B!
! -arinalKWatc hlist
> Sub$standard SS !&$&! Doubtful D* 3&$!! B #ad 7oss #7 R3&
Prin#i)al 1isk Com)onents: +ei%ht: *inancial isk &CH #usinessKIndustry isk 1BH -anaement isk 12H Security isk 1CH elationship isk 1CH
/stablish the Ke" Parameters Prin#i)al 1isk Com)onents: Ke" Parameters:
*inancial isk 7everae, 7iquidity, 8roFtability /overae ratio.
#usinessKIndustry isk Si)e of #usiness, "e of #usiness, #usiness 9utlook, Industry 5roEth, /ompetition #arriers to #usiness
-anaement isk perience, Succession 4eam Work. Security isk Security /overae, /ollateral /overae and
Support. elationship isk "ccount /onduct ,=tili)ation of 7imit, /ompliance
of covenantsKconditions 8ersonal Deposit.
>9. Di@eren#e between CC-! 3 CC-P CC -h")o CC -Ple%e
C1 4he stocks of oods are under the control of borroEer.
C1 4he stocks of oods are under the control of lendin #ank.
C2 *or this letter of hypothecation is obtained from the borroEer.
C2 *or this letter of plede is obtained form the borroEer.
C3 #orroEers have to submit stock report on monthly basis to the lendin #ank.
C3 #ank maintains plede reisterP stock reports not require to submit.
C! Incase of // +hypo0 #ank obtained su:icient collateral security for coverin loan risk.
C! Incase of //+8lede0 #ank takes other collateral security if available in the hand of borroEer.
>5. DP an Cal#ulation -arin is the borroEers contribution beside the borroEin contribution beside the borroEin for procurement of any asset Eith business interest. -arin of security is the di:erence betEeen the Eritten doEn value of the asset Fnanced and the outstandins in loan iven for it. 4he D8 of the clientK customer to be
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calculated after deductin the prescribed marin from the value of the securities o:ered +pleded or hypothecated0. =nder no circumstances, advance shall be alloEed in ecess of the D8 of the customer. In case Ehere the D8 of the client eceeds the limit sanctioned in its favor advances shall be alloEed upto the etent of sanctioned limit only.
>. SMA " /ontinuous credit, Demand loan or a 4erm 7oan Ehich Eill remain overdue for a period of GC days or more, Eill be put into the JS)e#ial Mention A##ount-SMAJ and interest accrued on such loan Eill be credited to Interest Suspense "ccount, instead of creditin the same to Income "ccount. 4his Eill help banks to look at accounts Eith potential problems in a focused manner and it Eill capture early Earnin sinals for accounts shoEin Frst sin of Eeakness. 7oans in the XS)e#ial Mention A##ount -SMAX Eill have to be reported to the /redit Information #ureau +/I#0 of #anladesh #ank. oEever, it is reiterated that loans in the XSpecial -ention "ccountX Eill not be treated as defaulted loan for the purpose of section 2(a(a+30 of the #ank /ompany "ct, 1GG1. Interest accrued on JS)e#ial Mention A##ount -SMA Eill be credited to Interest Suspense "ccount, instead of creditin the same to Income "ccount.
>. NPA "ainst Ehich income not eneratin basically those account Ehich account has been classiFed.
>8. /@e#t of NPA on Bank B7S "sset quality ets reduced, decreases proFt, hih provision has to be made
>E. +hat is 2oanable fun an how it is ,uanti;e 8aid up capitalV5eneralreserveV9therreserveVDepositsV#orroEinsV=ndistributedpro FtVeFnance loan +#anladesh bank, "D#, (fE, etc.0V/all loan$S7$HDemand deposit
>4. 2ar%e loan 7oan sanctioned to any individual or enterprise or any orani)ation of a roup amountin to 1CH or more of a bank<s total capital shall be considered as lare loan. 9utstandin Fnancin facilities by a bank to any sinle person or enterprise or orani)ation of a roup shall not at any point of time eceed 3&H +funded and non$funded credit facilities0 of the bank<s total capital $$ funded facilities do not eceed 1&H$$ all non$funded credit facilities included in the loan shall be considered as &CH credit equivalent. oEever, in case of eport sector sinle borroEer eposure limit shall remain unchaned at &CH of the bank<s total capital. #ut funded facilities in case of eport credit shall also not eceed 1&H of the total capital.
4he banks Eill be able to sanction lare loans as per the folloEin limits set aainst their respective classiFed loans % ate of net classiFed loans 4he hihest rate Fed for lare
loan aainst bank<s total loans advances
=pto &H &>H -ore than &H but upto 1CH &2H -ore than 1CH but upto 1&H !BH -ore than 1&H but upto 2CH !!H -ore than 2CH !CH
Page 12 of 119
Frst reschedulin
more than tEo times
minimum &CH 3CH Ehichever, is less
Deman an Continuous 2oan Amount of verue 2oan 1ates of Down )a"ment
=p to 4k.1.CC +one0 crore 1&H 4k. 1.CC+one0 crore to 4k. &.CC +Fve0 crore
1CH +but not less than 4k.1&.CC lac0
4k. &.CC+Fve0 crore and above &H +but not less than 4k.&C.CC lac0
If any /ontinuous or Demand 7oan is rescheduled by restructurinKconvertin partly or Eholly into 4erm 7oan and repayment installments have been Fed, application for reschedulin such loans shall be considered on cash payment of minimum 3CH of the overdue installments or 2CH of the total outstandin amount of loan, Ehichever is less. *or subsequent reschedulin minimum &CH of the overdue installments or 3CH of the total outstandin amount of loan amount shall have to be deposited in cash.
96. +rite o@ #anks may, at any time, Erite o: loans classiFed as badKloss. 4hose loans Ehich have been classiFed as badKloss for the last Fve years and for Ehich 1CCH provisions have been kept should be Eritten o: Eithout delay. "fter issuance of this circular the process of Eritin o: all other loans classiFed as badKloss should be started immediately. =nder the process the oldest badKloss classiFed loans should be considered Frst for Eritten o:. #anks may Erite o: loans by debit to their current year<s income account Ehere 1CCH provision kept is not found adequate for Eritin o: such loans.
9>. Mone" loan #ourt A#t& 9665 ->9& 55& 8& E& Mutual Settlement "rthain"dalat"in 2CC3 +B chapters >C sections0 promulated in the year 2CC3 in place of the "rthain"dalat "ct, 1GGC Ehich has came into e:ect on C1.C&.2CC3. LLLLL from the previous such laEs. 4his laE, for the Frst time empoEered Fnancial institutions Eith the riht to sell the mortaed properties Eithout K before oin to the court, if 8oEer of "ttorney to sell the mortaed property obtained from the borroEer at the time of eecution of mortae and made it mandatory to sell out the securities over Ehich the bank created chares before Flin of suits. "rthain"dalat"in Y2CC3 has Fed time limit for Flin of suit for recovery of debt. 4ime limit for servin of summons, submission of Eritten statements, 6udment, etc. and time limit for Flin of eecution suit has been reduced substantially in this laE Ehich shall epedite disposal of suits. "rthain"dalat "in$2CC3 provided for Settlement of disputes throuh Settlement /onference at the initiative of the court and in case of nonYsettlement throuh Settlement /onference, throuh "rbitration, keepin pendin the normal proceedins of the suit. "rthain"dalat"in Y2CC3 imposed some obliations to the bankers in respect of disposal Ksale out of securities, Flin of suits, folloE$ up of suits etc., failure to perform some of Ehich is punishable o:ence and may
Page 13 of 119
harm the interest of the bank to a reat etent. So relative o:icers and eecutives of the bank should read this laE meticulously and must act accordinly in timely manner to avoid leal complications.
99. Di@eren#e between #reit an investment
95. Di@eren#e between %uarantee an inemnit" 5uarantee is a promise by a third person to the lender for the present or future debt of the borroEer. #ank uarantee is an irrevocable obliation in the form of Eritten undertakin of a #ank to pay an areed sum, in case of default by a third party in fulFllin their obliations under the terms of the #ank 5uarantee. e.. #id bond, 8erformance bond, Shippin uarantee, etc. /ontract of Indemnity is a contract by Ehich one party promises to save the other from loss caused to him by the conduct of the promissory himself, or conduct of any other person. Di:erence % 5uarantee is an undertakin to pay the debts of the creditor Ehereas Indemnity is an assurance to compensate for any loss.
9. Char%es (i0e #har%e: " chare is said to be Fed is made specially deFnite and assets of a permanent nature or assets capable of bein ascertained and deFned, e.. chare or land and buildin or heavy machinery. It prevents the loanee from Eith the property chared Eithout consent of the chare holders. (loatin% #har%e: It is a chare on property, Ehich is constantly charin e.. stock. " company can Deal Eith such properly in normal course of its business until it become Fed on the hamperin of an event. 4hus, it is a chare on the assets of a company in eneral. Pari<)assu #har%e:8ari$passu chare is crated in cases of consortium lendin Ehere several banks on Fnancial institution lend to a sinle borroEers aeist some common securities in an areed ratio. In such chares all the creditors have equal priority, i.e. are entitled to have equal rihts over the assets as per the areed share. Se#on #har%e: " creditor holdin a second chare by Eay of mortae is entitled to the proceeds after the Frst chare is met. 4he second chare holder must inform the Frst mortae about the second chare, so that he cannot part of title of the property.
9. ime limit for ;lin% suit in Artha1inAalat Ain<9665. "rthain"dalat "in$2CC3 Fes time limit for Flin of suit for recovery of debt and stated that anythin otherEise contained in the 7imitation "ct,1GBC, a Fnancial institution shall Fle suit as per provision of the "rthain"dalat "in$2CC3 .4he provisions and time limit for Flin suits for recovery of debt in "rthain"dalat "in$2CC3 are as under %$
10 +here re)a"ment )erio is less than three "ears% a0 If the amount of recovery in the total loan period is less than 2CH, the
Fnancial institution shall Fle suit Eithin the period of one year from the date of epiry of the repayment schedule.
b0 In cases of reschedule of loan by the Fnancial institution Eithin the validity period of repayment, if repayment amount of loan is less then 2CH in the period of reschedule, the Fnancial institution shall Fle suit Eithin the period of one year from the date of epiry of reschedule period.
9 +here re)a"ment )erio is 5 "ears an above : If a borroEer fails to pay back the loan as under after startin of re$ payment schedule accordin to the terms of the loan areement ,the Fnancial institution shall Fle suit Eithin the period of net one year %$
Page 14 of 119
a0 "t least 1CH of Frst one years repayable loan amount or b0 "t least 1&H of Frst tEo years repayable loan amount or c0 "t least 2&H of Frst three years repayable loan amount.
In cases of reschedule of loan by the Fnancial institution Eithin the aforesaid time limit, the period of 1year or 2 years or 3 years shall be reckoned from the date of the reschedule of the loan and one years time limit for Flin suit shall be e:ective aneE as per above rules.
98. 2imitation in im)osin% #laim : "rthain"dalat"in Y2CC3 provides that Ehatever may contain in the areement betEeen the parties, the Fnancial institution Ehile institutin suit shall not claim more than 2CCH of the capital + oriinal loan 4k. 1CCV interest 4k. 2CC O 4k.3CC 0. 4he court shall not entertain any such claim Ehich shall be more than 2CCH of the capital.
9E. (un#tion of 1elationshi) Mana%er 1e)orts to: !ea of Cor)orate Bankin% Pur)ose of $ob: 4he 6obholder serves as the primary relationship contact Eith the #anks corporate and commercial customers. 4o maimi)e relationship proFtability throuh cross sellin. 4o minimi)e credit losses throuh thorouh risk assessment and timely identiFcation of deterioratin credit risk of customers. 1es)onsibilities: • 8rovide ood customer service Ehile ensurin the #anks interest is
protected. • 5roE the customer base throuh marketin and business development
e:orts, includin cross sellin to eistin customer base. • nsure that credit quality is maintained and customer revieEs are
completed in timely manner. • -aintain an in$depth knoElede of the customers business throuh
reular customer visits and industry research. • nsure facility risk rades are accurate, and are chaned in a timely
manner as soon as adverse information is knoEn. • Seek assistance from /- at the earliest if adverse trends in a
customers Fnancial position are noted. • *olloE up Eith customers to ensure the timely receipt of Fnancial
statements, loan payments and all documentary requirements of the #ank.
• nsure compliance Eith internal policies and procedures and eternal reulatory requirements, and that all internal and eternal audit recommendations are implemented.
94. (un#tions of Creit Aministration De)artment i. Disbursement
ii. /ustodian iii. /ompliance iv. -onitorin
9F. 2oan #lassi;#ation
Sub<stanar Doubtful Ba72oss
#ontinuous loan past dueKover due for > months or beyond but less than G months.
past dueKover due for G months or beyond but less than 12 months
past dueKover due for 12 months or beyond.
Deman 2oan past dueKoverdue for > months or
past dueKoverdue for G months or
past dueKoverdue for 12 months or
Page 15 of 119
beyond but not over G months from the date of claim by the bank or from the date of creation of forced loan.
beyond but not over 12 months from the date of claim by the bank or from the date of creation of forced loan
beyond from the date of claim by the bank or from the date of creation of forced loan.
(i0e erm 2oans, Ehich are repayable Eithin ma0imum ;ve "ears of time
If the amount of efaulte installment is equal to or more than the amount of installment+s0 due Eithin > +si0 months, the entire loan Eill be classiFed
If the amount of efaulte installment is equal to or more than the amount of installment+s0 due Eithin 12 +tEelve0 months, the entire loan Eill be classiFed
If the amount of efaulte installment is equal to or more than the amount of installment+s0 due Eithin 1B +eihteen0 months, the entire loan Eill be classiFed
(i0e erm 2oans, Ehich are repayable in more than ;ve "ears of time
If the amount of <defaulted installment< is equal to or more than the amount of installment+s0 due Eithin 12 +tEelve0 months, the entire loan Eill be classiFed
If the amount of <defaulted installment< is equal to or more than the amount of installment+s0 due Eithin 1B +eihteen0 months, the entire loan Eill be classiFed
If the amount of <defaulted installment< is equal to or more than the amount of installment+s0 due Eithin 2! +tEenty four0 months, the entire loan Eill be classiFed
Short<term A%ri#ultural an Mi#ro<Creit
after a period of 12 months
after a period of 3> months
after a period of >C months
56. Moe of #har%in% se#urit" a0 -ortae b0 ypothecation c0 8lede d0 7ien e0 "ssinment f0 Set$o:
5>. he )rovision rate of 2oans an Avan#es
8articulars ate 5eneral 8rovision on unclassiFed eneral loans advances 1H 5eneral 8rovision on unclassiFed small enterprise Fnancin 1H 5eneral 8rovision on unclassiFed housin Fnance, loans for professional and loans to share business
2H
5eneral 8rovision on special mention account &H 5eneral 8rovision on unclassiFed consumer Fnancin other than housin Fnance, loans for professional +?0 and loans to share business
&H
SpeciFc 8rovision on Sub Standard 2CH SpeciFc 8rovision on Doubtful &CH SpeciFc 8rovision on #ad 7oss 1CCH
Page 16 of 119
Trade Finance
1. N(CD : -/1M +ho #an o)en% "0"ll non$resident #anladesh nationals and persons of #anladesh oriin includin those havin dual nationality and ordinarily residin abroad. #0 #anladesh nationals servin Eith mbassiesKih /ommissions of #anladesh in forein countries as also the o:icersKsta: of the 5overnmentKsemi$5overnment departmentsKnationali)ed banks and employees of body corporate posted abroad or deputed Eith International and eional aencies like I-*, World #ank, ID#, "D# etc. durin their assinments abroad may open such accounts. /0 *orein nationals and companiesKFrms reistered andKor incorporated abroad, banks, other Fnancial institutions includin institutional investors and 1CCH forein oEned +"$4ype0 industrial units in the port 8rocessin Aones in #anladesh, are also alloEedto open and maintain J*/D accounts Eith the "Ds. 4he minimum amount of time deposits in such cases should be =SZ 2&,CCC or its equivalent in pound sterlin, uro or ;apanese yen. 9ther terms and conditions in respect of these account$holders Eill be the same as those mentioned above for J*/D accounts of non$resident #anladesh nationals. +ho Can not o)en% /reE members of the #anladeshi shippin companies are not entitled to open such accounts. Curren#ies:4he accounts may be maintained in =S dollar, pound sterlin, uro or ;apanese yenP initially Eith minimum amount of =SZ 1CCC or pound sterlin &CC or equivalent. "ccounts may be opened aainst remittances in other convertible currencies after conversion of those into =S Dollar, pound sterlin, uro or ;apanese yen Perio % 4he accounts are in the nature of term deposits maturin after one month, three months, si months and one year. Interest 1ates:4he "Ds Eill pay interest on deposits into the accounts at theeurocurrency deposit rates. In case of premature repayments, the interest amount Eill be forfeited to the depositin "D. a0:4he interest on deposits into this account is eempt from the ta payable under Income 4a "ct. +ithrawl of Prin#i)al an Interest:4he account holder can freely repatriate the balance and the interest accrue thereon in forein echane to the country of his residence or anyEhere he chooses and may at his option, convert the balance into local 4aka at the prevailin echane rate.
2. 1(CD: +ho #an )en: 8ersons ordinarily resident in #anladesh may open and maintain esident *orein /urrency Deposit +*/D0 accounts Eith forein echane brouht in at the time of their return from travel abroad. "ny amount brouht in Eith declaration to /ustoms "uthorities in form *-; and upto =S Z 3CCC brouht in Eithout any declaration, can be credited to such accounts. +ho #an not: "ny non residents and International Frms operatin in #anladesh Eill not be alloEed to open such accounts. 8roceeds of eport of oods or services from #anladesh or commission arisin from business deals in #anladesh shall not be credited to such accounts. Curren#ies:4he accounts may be maintained in =S dollar, pound sterlin, uro or ;apanese yen. Perio % 4he accounts Eill be treated as term only Ehen kept for a period of minimum 1 month. Interest 1ates:Interest in forein echane shall be payable on balances insuch accounts if the deposits are for a term of not less than one month and the balance is not le ss than =S Z1CCC or [&CC or its equivalent. 4he rate of interest shall be one quarter percent +C.2& percent0 less than the rate at Ehich interest is
Page 18 of 119
paid on balances of bank in their forein currency clearin accounts maintained Eith the #anladesh #ank. a0: Jothin has been said about 4a. It is deemed that "I4 Eill be applicable for such accounts. +ithrawl of Prin#i)al an Interest: #alances in these accounts shall be freely transferable abroad. *und from these accounts may also be issued to account$holders for the purpose of their forein travels in the usual manner +i.e. Eith endorsement in passport and ticket, upto =S Z 1&CC in the from of cash currency notes and the remainder in the form of 4/0.
3. 1etention Quota A##ount: +ho #an )en: "0-erchandise eporters are entitled to a forein echane retention quota of &CH of repatriated f.o.b value of their eports. oEever, for eports of oods havin hih import content +loE domestic value$added0 like 897 products includin naphtha, furnace oil and bitumen. readymade arments made of imported fabrics, electronic oods, etc. the retention quota is 1CH of the repatriated f.o.b value. #0 Service eporters may retain &H and SoftEare and Data entryKprocessin eporters may retain !CH of their repatriated income as etention @uota. Curren#ies: 4he accounts may be maintained in =S dollar, pound sterlin, uro or ;apanese yen
4. (C A##ount: Foreign Currency Account (FCA) is a trasa!tioa" a!!out deo#iated i a !urre!$ ot%er t%a t%e %o#e !urre!$ ad !a &e #aitaied &$ a &a' i t%e %o#e !outr$ (os%ore) or a &a' i aot%er !outr$ (offs%ore).
5. BP: +hat it is: #98 is a summary of statement of all its economic transactions Eith the rest of the Eorld at a iven year. 4Eo components i0 /urrent account, ii0 capital account. /urrent account includes trade in oods and services and unilateral transfers. /apital account shoEs the chane in the nations assets abroad and the forein asset in the nation.
Com)onents of Current a##ount an Ca)ital A##ount: Current a##ount% ports of oods and services%
port of oods port of services
+$0 Import of oods and services% Import of oods Import of services
Balan#e of rae 4he net of =nilateral transfers% eceipts
5rants 5ifts 8rivate InEard remittances
8ayments 5rants 5ifts 8rivate 9utEard remittances Balan#e of Current a##ount Ca)ital A##ount: utLow: -Assets in abroa: 5ovt. assets other than o:icial reserve
Page 19 of 119
8rivate assets% Direct investment in abroad *orein Securities Jonbank /laims #ank liabilities InLow: -(orei%n Assets in the nation *orein Direct investment =.S.4reasury and other =.S. Securities Jonbank liabilities #ank liabilities Balan#e of Ca)ital a##ount
6. S+AP: In eneral SW"8 is simultaneous sale and purchase of identical amounts of one currency aainst another, for di:erent maturities. " SW"8 could be spot aainst forEard or forEard aainst forEard.
7. NIA: Jon$resident personsKinstitutions includin non$resident #anladesh nationals may buy #anladeshi shares and securities in #anladesh aainst freely convertible forein currency remitted from abroad throuh the bankin channel. 4ransactions relatin to such investments includin repatriation of dividendK interest earnins and sale proceeds shall be made throuh a Jon$resident Investor<s 4aka "ccount +JI4"0
8. /D( : 4his fund Eas created in 1GBB Eith the fund provided by ID" to 59# vide #/D circular 2G dated CK12K1GBB to assure continued availability of *orein chane to meet the import requirement for eport of non traditional items includin -5. 4his fund is basically used to provide funds to the eporters for import of raE materials on siht basis to brin conFdence of the forein suppliers. 4he total fund amount as of noE is Z1&C.CC million and the maimum amount of credit can be iven to a particular eporter is Z1.&C million. 4he interest Eill be deducted \ 7I#9 V 1 from the date of utili)ation of the fund.
9. Bill of /0#han%e: #ill of chane act 1BB2#ill of echane is an unconditional order in Eritin addressed by one person to another, sined by the person ivin it requirin the person to Ehom it is addressed to pay on demand or at Fed or determinable future time at a certain sum of money to or to the order of a speciFed person or to the bearerT. 4he main features are% a0 It must be Eritten unconditional order by a deFnite draEer to pay a deFnite sum of money, b0 4he sum, as speciFed in it must be payable by a deFnite draEee on demand or on a Fed date or on an ascertainable date, c0 It must be payable to a set person or to his order or to the bearer, d0 It must be duly referred, dated, stamped, endorsed +if required0 and sined by the draEer and also indicatin the place of the draEin.
10. Nostro A##ount: " banks account Eith a correspondent bankKbranch abroad in the currency of
that country.
11. ostro A##ount: " local currency account of a forein bankKbranch. 4hus the nostro account of the account holder is a vostro account for the bank Ehere it is maintained.
Page 20 of 119
12. 2oro A##ount: 4he forein banks maintainin accounts Eith each other in the separate territory other than host nation is knoEn as 7oro account. Simply their account Eith them.
13. Di@erent t")es of Intl rae Pa"ment: Cash in avan#e: #uyer places the funds at the disposal of the seller prior shipment of the oods or services. )en a##ount: "n arranement betEeen the buyer and the seller Ehereby the oods or services delivered to the buyer before any payment received by the seller. Colle#tion: "n arranement betEeen the buyer and the seller Ehere the seller ship the oods and relevant bi lo echane is draEn by the seller on the buyer and document+s0 sent to the bank Eith clear instruction for collection throuh one of its correspondent bank located in the domicile of the buyer.
")e of #olle#tion: O1C 99& >FF8 Do#umentar" #olle#tion: "fter shipment, the seller submits drafts and other documents to the remittin bank Ehich sends the documents to the collectin bank for payment. "rticle 2/, =/ &22, 1GG>. Clean Colle#tion: "n arranement Ehereby the seller draEs only a draft on the buyer for the value of the oods and submits the same to the remittin bank for payment. "rticle 2/, =/ &22, 1GG>. Dire#t #olle#tion: " direct collection is an arranement Ehereby the seller obtains his banks pre$numbered direct collection letter, thus enablin him to send his documents directly to his banks correspondent bank for collection. 4his accelerates the paper Eork process.
Do#umentar" Creit:4he documentary credit is a deFnite undertakin issued by a bank on behalf of the applicant or for its oEn use, to pay the beneFciary the value of the draft or documents provided that the terms and conditions of the credit complied Eith.
14. Parties involve in 27C: a0 "pplicant, b0 Issuin bank, c0 "dvisin bank, d0 /onFrmin bank, e0 4ransferrin bank, f0 #eneFciary, 0 8ayinKJeotiatinK"cceptin bank, h0 eimbursin bank.
15. ")es of 27C: 1evo#able Creit: " revocable credit is a credit Ehich can be amended or cancelled by the issuin bank at any time Eithout prior approvalK notice to the beneFciary. Irrevo#able Creit:Since an irrevocable credit is that Ehich can not be amendedKcancelled Eithout any prior approvalKnotice to the beneFciary. 1evolvin% Creit: 4he revolvin credit is one Ehich restorin the credit to the oriinal amount after it has been utili)ed. 4he revolvin credit can be /umulative or Jon$cumulative. " cumulative revolvin credit is that Ehich can not eceed the total 7K/ value after revolvin. " non$cumulative revolvin 7K/ is that Ehich is established for a certain amount and can revolved Eith that amount for a certain period of time. ransferable Creit:4he transferable credit is the one that can be transferred by the oriinal beneFciary in full or in part to one or more subsequent beneFciaries. Such credit can be transferred one only. "rticle 3B =/8 >CC. 1e Clause Creit: " red clause credit is a credit Eith a special condition incorporate into it that authori)es the conFrmin bank or any other nominated bank to make advances to the beneFciary before presentation of the documents.
Page 21 of 119
=nder this type of credit the openin bank is liable for such pre$shipment credit made by the neotiatin Knominated bank. Stan b" Creits:4he stand by credit is a documentary credit or similar arranement hoEever named or described Ehich represents an obliation to the beneFciary on the part of the issuin bank to% a0 epay money borroEed by the applicant or advanced to or for the
account of the applicant. b0 -ake payment on account of any indebtness undertaken by the
applicant or c0 -ake payment on account of any default by the applicant in the
performance of an obliation.
16. 27C settlement methos: a0Settlement by 8ayment, b0 Settlement by "cceptance, c0 Settlement by
Jeotiation.
17. INC/1MS 9666 -/+&C(1& CI(& CP& CIP& DA(& (AS&(B : /+: N Works means theseller delivers the oods at the disposal of the buyer at his premises or at any named places not cleared for eport and not loaded on any vehicles. C(1: /ost and *reiht means the seller must pay the costs and freiht necessary to brin the oods to the named port or destination but the risk of damae or loss after delivery are transferred from the seller to buyer. =sed for marine and inland EaterEay transport. CI(: /ost Insurance and *reiht means the seller must pay the costs and freiht necessary to brin the oods to the named port or destination but the risk of damae or loss after delivery are transferred from the seller to buyer. -oreover the seller has to procure marine insurance aainst the buyers risk of loss or damae to the oods durin the carriae. =sed for marine and inland EaterEay transport. CP% /arriae 8aid 4o means the seller delivers the oods to the carrier nominated by him and should pay the cost of the carriae to brin the oods to the named destination but the risk of damae or loss after delivery are transferred from the seller to buyer. =sed for any mode of transportation includin multimodal. CIP% /arriae and Insurance 8aid to means the seller delivers the oods to the carrier nominated by him and should pay the cost of the carriae to brin the oods to the named destination but the risk of damae or loss after delivery are transferred from the seller to buyer. -oreover the seller has to procure marine insurance aainst the buyers risk of loss or damae to the oods durin the carriae. =sed for any mode of transportation includin multimodal. DA(% Delivered "t *rontier means that the seller delivers the oods at the disposal of the buyer on the arrivin means of transport not unloaded for eport but not cleared for import at the named point or place. =sed mainly for land K frontier trade. (B% free on #oard means that the seller delivers Ehen the oods pass the ships rail at the named port of shipment. 4his means that the buyer has to bear all the costs and risks of loss or damae to the oods from the point of delivery. =sed for marine and inland EaterEay transport.
18. ransshi)ment: 4ransshipment enerally means transfer and reloadin from one mode of transport to another mode of transport + Incase of multimodal transport document0 or from one vessel to another vessel Eithin the same mode of transport + incase of marine and air transport document0. #ut in case of road,
Page 22 of 119
rail or inland EaterEay transport document, transshipment means conveyance to another means of conveyance, such as road to rail to EaterEay etc.
19. ")es of B72: "rticle Y 2C =/8 >CC
hrou%h B72:When a #K7 covers oods bein transshipped en$route. It covers the Ehole voyae from one point of shipment to Fnal destination. Simply one transport document is used. Short (rom7Blank B72: #K7 in Ehich the detailed conditions of transportation are not listed in full on the back of the #K7. Strai%ht B72: 4he #K7 Ehich is issued to the name of a certain party or directly in the name of the consinee and Ehich can not be transferred by endorsement. Port or Custo" B72: #K7 issued by the port o:icer or Eare house supervisor statin that the oods have been received for shipment. Mates re#ei)t: When the oods are handed over to the aent of the shippin company for shipment and the aents contracts to do so and issues a receipt Ehich is knoEn as -ates eceipt. When the oods are actually shipped the -ates receipt is echaned Eith the reular #K7. n Boar B72: It is issued after the oods have been received on board of the ship. Charter Part" B72: " charter party is a contract under Ehich a ship oEner arees to place his ship, at the disposal of a merchant or other person +/harterer0 for the carriae of oods from one port to another +voyae charter0 or to let his ship for a speciFed period +time charter0. 4Eo types % Demise + Ehen the ship oEner only provides vessel and Jon demise +Ehen the ship oEner provides both vessel and creE0. "rticle 22,, =/8 >CC. (orwarers Certi;#ate of 1e#ei)t: It is issued by a freiht forEarder as a carrier or multimodal transport operator or as an aent of a carrier or multimodal transport operator for the oods received from shippers. Clean B72: " #K7 or transport document is one Ehich bears no clause or notation Ehich epressly declares a defective condition of the oods andKor packain. "rticle Y 2, =/8 >CC.
20. Do#uments of 27C -")es 3 Name: a0 #ill of echane, b0 Invoices and other documents, c0 4ransport documents, d0 Insurance documents. 4otally these all are called shippin documents.
21. Convertibilit" of #urren#": " currency is said to be convertible Ehen it may be fully echaned for another currency. /onvertibility of currency is not meant for domestic transaction purposes. It is only required for international transactions. In #anladesh /urrent account has made convertible on 9ctober 2C, 1GG3. 4he capital account has been made partially convertible Eith the *orein Direct Investment and for Securities investment throuh JI4".
22. ver invoi#in% 3 Oner invoi#in% an its e@e#t: 9ver Invoicin Y ecess value than the actual value Y e:ect $ *orein /urrency Drain, =nder Invoicin Y less value than the actual value Y e:ect $ Duty 7oss.
23. /@e#t on im)ort 3 e0)ort when taka %ets stron%er than (.C.: When #D4 ets stroner than the vale of the */ ets doEn, means the more */ is available Eith the same amount of #D4. =sually it is done Ehen the countrys *N reserve remains more than required level and Ehen the eport V remittance earnins are much hiher than the import V */ payments. "t this situation import
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is encouraed since more */ can be obtained aainst #D4 and the eport is discouraed since the eporters Eill receive less #D4 aainst */ earnins.
24. A##ommoation bill: "n accommodation bill is prepared by the draEerKseller on the draEeeKbuyer Eithout any supply of any oods and services. 4his is done to provide some Fnancial help to the draEerKseller. In our country this is possible for inland transactions and for international transactions this type of accommodation is not possible.
25. /0)ort ;nan#in% H Pre<shi)ment& Post<shi)ment: 8re$shipment eport Fnancins are Y ##7/, 8ackin /redit, // +ypo0, // +8lede0, 8ost Shipment eport Fnancins are Y Jeotiation of eport bill, #ill purchase, "dvance aainst port bill, Short 4em advances aainst eport etc.
26. OCP 866: /@e#tive from $ul" 6>& 966E. 5F arti#les 27. O1C 99: /@e#tive from $anuar" 6>& >FF8. 9 arti#les.
28. Di@eren#e between 2BP72ADB: 7#8 is 7ocal #ill 8urchased Ehich means the bank shall purchase the clean inland eport documents on presentation and shall ive the value to the eporters Eithout charin any interest on the face value of the bill. 9n the other hand the 7"D# is 7oan aainst Documentary #ill means providin an eporter a post shipment loan aainst an eport document, Ehether clean or not, Eithout purchase of the same and shall chare interest on the face value of the bill.
29. (orei%n e0#han%e )osition: *orein echane positions are represented by the balance of forein echane operations +purchase and sale of forein currency, securities and documents that represent them, and old Y echane instrument0 recorded in a bank at a certain day. )en )osition: ach open position has four ma6or characteristics% 'ou<re tradin a particular currency pair, you<re either lon or short the market +you<ve bouht or sold, respectively0, the si)e of the position in increments of 1CC,CCC of the base currency, and an echane rate at Ehich the position Eas opened. *or eample a X=K=SD, &CC, S, C.G22CX, means the trader Sold &CC,CCC uros for =.S. Dollars at an echane rate of C.G22C. Short Position: Short positions are taken Ehen a trader sells currency in anticipation of a doEnturn in price. -akin this move alloEs the investor to beneFt from a decline. 2on% Position:7on positions are taken Ehen a trader buys a currency at a loE price in anticipation of sellin it later for more. Intera" an verni%ht Position:Intraday positions are all positions opened anytime durin the 2! hour period "*4 the close of *ore /apitals normal tradin hours. 9verniht positions are positions that are still on at the end of normal tradin hours Ehich are automatically rolled by *ore /apital -anaement.
30. Dealin% room: A dealing room is a place where shares, currencies, or commodities are
bought and sold.
31. Di@eren#e between entre<)ot an re<e0)ort: /ntre)ot /0)ort: ntrepot trade may be carried out in compliance Eith the port 8olicy and Import 8olicy 9rder in force sub6ect to the folloEin conditions%
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a0 4he value of eport is at least &H more than the import value b0 Jo chane can be made in respect of quantity, quality, shape or any other attribute of the oods intended to be imported for entrepotP c0 5oods imported to #anladesh may be taken outside the port area only Eith the special approval of the concerned authorityP d0 "D Eill not provide any forein currency from local sourceP import cost +on back to back basis0 may be met from reali)ed proceeds throuh entrepot tradeP that is, "D Eill not bear any liability on behalf of its customers for import payment in entrepot tradeP
1e</0)ort: e$eport +import for eport0 may be carried out in compliance Eith the port 8olicy Import 8olicy 9rder in force sub6ect to the folloEin conditions Eherein import, processin and subsequent re$eport shall be conducted under the authori)ation and supervision of /ustoms "uthorities% a) 5oods +includin oods under control list0 may be imported for re$
eport under bonded EarehouseK 1CCH bank uaranteeK provision of duty draE back for 1CCH eport Eithin stipulated timeP
&) -inimum value addition shall be 1CHP Eherein re$eport consinment is brouht in #anladesh for subsequent re$shipment in favor of forein buyer, import cost alonEith freiht Eill not eceed GCH of the *9# value of re$eport.
!) @uality, quantity and shape of the oods are required to be chanedP
32. Pro#eure for issuan#e of Inustrial I1C: "t Frst an industrial I/ is issued on adhoc basis for an year Eith the amount to be imported for the 1st year. "fter completion of the Frst year the concerned authority of //I shall check the H of the amount authori)ed at the time of 1streneEal. If the industrial concern Eas able to utili)e at least BCH of their limit then //I issues the reular I/. If the amount is less than BCH then the concern Eill be iven as 2ndadhoc.
33. BB2C ? as )er Im)ort Poli#" rer: a. *or (nit arments minimum value addition should be 2CH b. *or all non$quota cateory oven items minimum value addition should be
2CH c. If the price of the quota cateory oven item is *9# =SD!C.CC the3n
minimum value addition should be 2CH d. *or all type of quota cateory if *9# value more than =SD!C.CC minimum
value addition should be 2CH but minimum price per d)n should be not less than =SD12.CC
e. *or hih value added quota and non quota -5, minimum value addition should be 2CH and 1&H respectively.
f. *or all type of sEeater eport minimum value addition should be at least 2CH
. *or kids Eear the minimum value addition should be 1&H
34. Cash (C an C sell limitation: *or any esident #anladeshi the maimum amount of */ can be taken under travel quota is =SD3CCC.CC of Which maimum =SD1&CC.CC can be taken as cah and other in the form of 4/. #ut if the esident #anladeshi maintains */D account, he Eill be alloEed take */ upto the account balance Eith the endorsement in the passport and Eith the cash limitation of =SD1&CC.CC.
35. 1ules relate to /P #on#erns: (C A##ounts of /P #on#erns: 4he folloEin procedure shall apply to release of forein echane to the enterprises aainst eports made from 8As% >66? of re)atriate e0)ort )ro#ees of a ")e A inustrial unit in
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8A may be retained in */ account in the name of the unit Eith an "D in #anladesh. #alances in the */ account may freely be used to meet all forein payment obliations includin import payment obliations of the unit and payment obliations in forein echane to #8A". #alances from the */ account Eill also be freely encashable for local disbursements or for creditin 4aka account maintained Eith an "D for meetin 4aka payment obliations like Eaes, rents, rates, taes etc. 4aka account maintained Eith "Ds by 4ype " units in 8A may be credited only Eith encashments of funds from */ accounts or of other inEard remittances from abroad. oEever, receipts from 4aka sales of factory refuses and of unusable portion of raE materials of 4ype " industries may be credited to the 4aka accounts provided the permission letter of #8A" for the sale and evidence of payment of dutiesK taes on sale proceeds are produced to the "D. #alances in the 4aka accounts cannot be converted to forein echane and may only be used for meetin local epenses
=pto BCH of the repatriated eport proceeds of 4ype # and 4ype / units other than those in the arments sector may be retained in */ "ccounts maintained in the names of the units Eith their "DsP for a 4ype # or 4ype / unit in the arments sector, upto &H of the repatriated eport proceeds may be credited to */ account maintained in the name of the unit Eith an "D. 4he remainder of the eport proceeds should be encashed to taka at the prevailin echane rate. "ll forein payments obliations of 4ype # and 4ype / units includin import payments and repayments of forein loans may be met out of the balances in their */ accountsP payment obliations in forein echane of a type # unit to the #8A" may also be settled from balances in its */ account. #alances in the */ accounts of the 4ype # and 4ype / units are freely encashable to 4aka for local disbursements
Creit fa#ilities to /P #on#erns: +"0 1CCH forein oEned enterprises in the 8As knoEn as type " industries may obtain short term forein currency loans from overseas banks and Fnancial institutions sub6ect to the folloEin conditions% +i0 4he loan shall be received throuh an "D in #anladeshP and the loan
proceeds Eill be credited to the */ account maintained by the "D in the name of the 4ype " unit, to be used for Fnancin import of capital machinery and raE materials, payment of interest Kservice chares, repayment of loans and for creditin 4aka account for meetin local epensesP
+ii0 9nly assets fully oEned by the 4ype$" industry may be loded as collaterals for such loansP
+iii0 epayment of principal and interest on the loan shall be remitted out of the balances available in the */ account Eithout prior #anladesh #ank approval. Jo fund may be provided from the "Ds oEn resources for such repayment ecept Eith prior approval of #anladesh #ankP
+iv0 In case the loan is called up by the creditor, the asssets chared to forein lender Eill be alloEed to be sold only in forein echane and proceeds, after payin o: all local liabilities in #anladesh, may be remitted abroad Eith #anladesh #anks approvalP
+vi0 Jo 4aka loan aainst repatriable short term forein currency loan Eill be alloEed to a 4ype " industry.
+#0 4ype # industries +6oint venture pro6ects0 may also obtain such loans sub6ect to conditions applicable to 4ype " industries as indicated above, ecept that 4ype # industries Eill not be permitted to mortaeK hypothecate their Fed assets, raE materials in favour of any non$resident. 4he "Ds may, hoEever, issue uarantee to overseas banksK Fnancial institutions for short term forein currency loans brouht into #anladesh by 4ype # industries, sub6ect to prior approval of the #anladesh #ank.
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4aka loan maybe ranted to a 6oint venture +4ype #0 industrial unit in 8A upto 1CCH of short term forein currency loan brouht in and encashed to 4aka. 7oan in 4aka for procurement of capital machineries for settin up a 4ype # industry, not eceedin the local partners share of oEnership of the unit, may be etended on normal 4aka loans to 4ype # units banker$customer relationship. 8rior #anladesh #ank approval should be obtained by the "D Ehile providin forein echane for import of the machineries out of the 4aka loan. epayments of the 4aka loans alonEith interests should be received out of the forein echane earnins of the unit.
"Ds may etend credit facilities to 4ype / industries +1CCH locally oEned0 as admissible to
such industries outside 8 A.
In establishin import 7/s on account of 4ype ", # and / units in the 8As "Ds shall bear in mind the position that the import payments may be made only out of the forein echane earnins of the concerned units or out of their borroEins abroad credited in their */ accounts, and that no funds from the "Ds oEn forein echane resources can be used for this purpose. #efore openin inputs import 7/ aainst an eport 7/ or eport order received by an 8A unit the "D should satisfy itself completely about the clarity of the conditions in the eport orderK 7/, the standin and credit of the forein buyer and the ability of the eportin unit for timely eecution of the eport order. In openin inputs import 7/s on account of 4ype # and 4ype units, domestic value addition requirements prescribed for the respective items by the -inistry of /ommerce should also be abided by. Import payments aainst the 7/s should be scheduled in a manner that payment obliations do not fall due before receipt of eport proceeds. In all cases of openin input import 7/s on accounts of units in the 8A, "Ds should satisfy themselves that necessary arranements have been made by the opener that in case of shortfall or delay in eport receipts, forein echane Eould be made available from eternal sources.
36. Quota : "pplication of a reduced or )ero duty rate for a speciFed quantity of imported oods, or for oods imported durin a iven period.
37. *SP: 5S8 +5eneral System of 8references0 =nder Ehich oods from certain countries are iven preferential rates of import duty.
38. Chan%es in OCP 866: a. 4he term parties has been replaced by banks. b. Important deFnitions of the =/8 have been accumulated into a sinle
article c. "ll interpretive issues of =/8 have been placed into a sinle article d. evocable letter of credit has been kept out of the scope of the =/8 >CC. e. In eneral, articles stated in future form in =/8 &CC are restructured into
present form. f. 4he phrase unless otherEise stipulated in the credit has been removed
from =/8 >CC. . 4he phrase on its face has been mostly taken out from the articles Ehile
composin the tets of the =/8 >CC h. 4he common startin of transport document if a credit calls for has been
dropped, and in all other respects meets the stipulations of the credit of =/8 &CC has been removed form =/8>CC.
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i. "rticle & and 12 of =/8 &CC reardin incomplete and unclear instructions, "rticle B in reard to evocation of a /redit, and article 3C connected Eith 4ransport documents issued by freiht forEarders of =/8 &CC have found no place in the =/8 >CC.
6. In the article 1 of =/8 &CC, the phrase shall apply to all documentary credit is replaced by are rules that apply to any documentary credit.
k. Some of the deFnitions of article 2 ]line G^ appears to have neE meanin. "pplicant has been termed as party. /redit has been deFned only as irrevocable undertakin.
l. Introducin the term onour o:ers a neE dimension. 4he deFnition of Jeotiation appears di:erently. "nd the =/8 >CC has deFned presentation eplicitly.
m. Interpretation of the term #ank rihtly accommodates other entities to demonstrate Eider scope.
n. "ddition of a sentence has made it is more distinct that credit is a separate contract
o. "ll parties concerned has been replaced by banks of =/8 >CC. p. =/8 >CC has identiFed four terms of payment , no di:erent from =/8
&CC. q. 4he liabilities and responsibilities of issuin and conFrmin bank have
been split out in tEo articles. r. =/8 >CC brins in the concept of second advisin bank. s. "mendment issues alon Eith advisin banks responsibilities related to
amendment of =/8 &CC have been placed in a neE article. t. Slihtly modiFed tet of the article 1C ]c^ of =/8 &CC has been placed
under a neE title Jomination. u. emoval of as reUected in these articles at the end of international
standard bankin practiceP v. -aimum period alloEed to eamine documents reduced to Fve bankin
days from sevenP E. 4he term reasonable time has been removed in connection Eith time
required for eamination of documents . 4he =/8 &CC provision on submission of documents Eithin 21 days after
the date of shipment has been accommodated under a neE articleP y. 4he =/8 &CC article 22 on Issuance Date of Documents _. /redit Date
retained in the =/8 >CC Eith neE Eordins. ). 4he presentation of documents by or on behalf of the second beneFciary
has been made to the transferrin bank.
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Di@erent t")e of Bankin% 3 Bankin% Prou#ts
1. Mer#hant bankin%: Mer#hant Bankin% encompasses tEo ma6or businesses Y 8ortfolio -anaement, and Issue -anaement and =nderEritin Y Ehich serve both the demand and supply sides of the capital market.
2. @ shore Bankin%: 8art of international bankin business operates free of various constraints and taes. 9:$shore bankin transactions are carried out in forein currencies and transacted betEeen foreiners.
3. Bri%e (inan#in%: 8urely short$term creditKadvance etended to a person or a concern pendin the receipt of fund from another source. It is nothin but a stop$ap arranement to avail a temporary credit line by a customer from his banker. _ery frequently this sort of Fnance is required by pro6ects Ehen actual credit ivin aency is unable to disburse the loan in time, the concern of the pro6ect then moves to a bank to avail credit line to establishKcommission the pro6ect in time. It is also called SEin 7oan, made in anticipation of lon term Fnancin.
!. S"ni#ation: " Syndicated facility is a lendin facility, deFned by a sinle loan areement, in Ehich several or many banks participate.
&. Se#uriti'ation: Securitisation is the process of poolin and repackain of homoenous illiquid Fnancial assets into marketable securities that can be sold to investors. 4he process leads to the creation of Fnancial instruments that represent oEnership interest in, or are secured by a sereated income producin asset or pool of assets. 4he pool of assets collateralises securities. 4hese assets are enerally secured by personal or real property +e.. automobiles, real estate, or equipment loans0, but in some cases are unsecured +e.. credit card debt, consumer loans0.
>. (a#torin%: 4he factor, the banker, undertakin to collect, to account for and manae clients debts and also Fnances the clients either by lendin aainst account receivables or purchasinKdiscountin them outriht for a chare called discount.
E. Bankers A##ount:
B. 1etail Bankin% 3 +holesale bankin%:etail bankin is typical mass$market bankin Ehere individual customers use local branches of larer commercial banks. Services o:ered include% savins and checkin accounts, mortaes, personal loans, debit cards, credit cards, and so forth. etail bankin Xis typical mass$market bankin Ehere individual customers use local branches of larer commercial banks. Services o:ered include% savins and checkin accounts, mortaes, personal loans, debit cards, credit cards, and so forth.XWhereas
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Eholesale bankin is #ankin services betEeen merchant banks and other Fnancial institutions.
G. Suborinate& suborinate& suborination:Debts or claims that have a loEer status or priority than other debts or claims are subordinate. *or eample, creditor " may aree in a subordination areement to have its claims on the cash UoE or on the assets of a borroEer loEer in priority than +i.e., subordinate to0 the claims to that cash UoE or collateral by creditor #. In Fnance and accountin, the term also refers to debts that include provisions makin them subordinate to other liabilities. *or eample, a bond issue may, by contractual areement, be subordinate to all other bonds issued by a company.
1C.ero #ou)on bon: " type of debt security that does not pay periodic interest. Aero coupon securities are bouht and sold at prices that are less than the par value of the securities. 4he discount, or di:erence betEeen the principal paid to purchase the security and the principal returned at maturity, constitutes the investor<s return.
11. enture #a)ital:/apital provided by a bank or any other Fnancial institutions to a business enterprise to start a neE business. 4his capital is often considered as risk capital since neE business or the pro6ect may collapse at the beinnin of its operationP but such venture may also brin hih returns as Eell.
12.*reen Bankin%: "mericans are startin to turn to eco$friendly bankin as a Eay to help reduce the carbon footprint from their normal bankin activities. 4his movement aEay from branch and paper bankin is bein led by reen banks that believe in social responsibility.
4he easiest Eay for you to bank reen is to start usin the online bankin services that are available. #eneFts of online bankin include less paperEork, less mail and less drivin to branch o:ices, Ehich all have a positive impact on the environment. Interestinly, online bankin can also increase the e:iciency and proFtability of a bank. " bank can loEer their oEn costs that result from paper overload and bulk mailin fees as more customers use online bankin.
5reen bankin can also reduce the need for epensive branch banks and customer service representatives. So if a bank is not yet utili)in reen bankin, shareholders of the bank may start askin....Ehy not?
#anks can do much more to help the environment than 6ust promote online bankin. " truly reen bank Eill reduce their carbon footprint by buildin more e:icient branches, implementin enery$e:icient operational procedures, o:erin transportation services for their employees, promotin sustainable bankin and increasin their lendin in environment$sensitive industries. #anks can also support eco$friendly roups and raise money for local environment initiatives.
#ank products and services can also reUect a reen bankin commitment.
5reen Deposits% #anks can o:er hiher rates on /Ds, money market accounts, checkin accounts and savins account if customers opt to conduct their bankin activities online.
5reen -ortaes and 7oans% " bank can o:er reen mortae Eith better rates or terms for enery e:icient houses. Some reen mortaes alloE home buyers to add as much as an additional 1& percent of the price of their house into loans for uprades includin enery$e:icient EindoEs, solar panels, eo$thermal heatin or Eater heaters. 4he savins in monthly enery bills can o:set the hiher monthly mortae payments and save money in the lon run.
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4he nery :icient -ortae +-0 is a type of =D$approved reen mortae that Eill credit you for your homes enery e:iciency in the mortae itself. -any home improvements also qualify for the enery ta credit. "nyone undertakin an enery$savin house pro6ect, should shop around for a bank that o:ers a special rate for a reen mortae or loan.
5reen /redit /ards% " reen credit card alloEs cardholders to earn reEards or points Ehich can be redeemed for contributions to eco$friendly charitable orani)ations. 4hese cards o:er an ecellent incentive for consumers to use their reen card for their epensive purchases. Imaine the millions of dollars that could be raised for EorthEhile environmental roups if reen credit cards really took o:.
5reen eEard /heckin "ccounts% " bank product called a reard !%e!'ig a!!outs pays a bonus rate for customers Eho o reen. /ustomers can earn hiher checkin account rates if they meet monthly requirements that miht include receivin electronic statements, payin bills online or usin a debit or check card. With this bankin product hiher rates and eco$friendly livin o hand$in$hand.
What can you do?
/onvertin to online bankin and mobile bankin are tEo Eays that you can do your part to bank reen and help the environment. 5reen bankin via your computer or cell phone includes settin up direct deposit to receive your paychecks, receivin electronic statements from your bank and payin bills online. "ll of these steps can drastically reduce the amount of paper produced by your bank. 9nline bankin and mobile bankin are also hihly e:ective Eays to keep track of your Fnances and to avoid late payment fees.
"nother reen bankin step you can take is to suest that the company you Eork for sin up for a product called Xemote DepositX. 4his service is o:ered by a roEin number of banks to their commercial customers. emote deposit is the diital scannin and processin of checks from your computer or smartphone. It is a convenient service Eithout the paperEork and environmental costs associated Eith traditional branch deposits.
-any banks claim to be be eco$friendly, but in fact do little to support environment initiatives Eith the money you deposit Eith them. "sk your local bank eactly hoE they support the environment before assumin that their self$anointed X5reen #ankX label is deserved. /hances are ood that there is a bank in your local area that is more socially$conscious than their competitors. If you open an account Eith that bank, then you are doin your part to support the environment.
*inally, the more people Eho actively search for and support eco$friendly banks, the more competition for deposits Eill increase. 4his Eill help raise the aEareness for reen bankin. (eep track of the latest neEs on reen bankin on -oneyates.
Poli#" *uielines for *reen Bankin%
Introu#tion:
We are aEare that lobal Earmin is an issue that calls for a lobal response. 4he rapid chane in climate Eill be too reat to alloE many eco$systems to suitably adapt, since the chane have direct impact on biodiversity, ariculture, forestry, dry land, Eater resources and human health. Due to unusual Eeather pattern, risin reenhouse as, declinin air quality etc. society demands that business also take responsibility in safeuardin the planet. 5reen Fnance as a part of 5reen #ankin makes reat contribution to the transition to resource$e:icient and loE carbon industries i.e. reen industry and reen economy in eneral. 5reen bankin is a
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component of the lobal initiative by a roup of stakeholders to save environment. 4he state of environment in #anladesh is rapidly deterioratin. 4he key areas of environmental deradation cover air pollution, Eater pollution and scarcity, encroachment of rivers, improper disposal of industrial medical and house$hold Easte, deforestation, loss of open space and loss of biodiversity. In addition, #anladesh is one of the most climate chane vulnerable countries. In line Eith lobal development and response to the environmental deradation, Fnancial sector in #anladesh should play important roles as one of the key stake holders. In response to the above, urent measures are required by stake holders for sustainable development and thereby save the planet. #anks hold a unique position in an economicsystem that can a:ect production, business and other economic activities throuh theirFnancin activities and thus may contribute to pollute environment. -oreover, eneryand Eater e:iciency and Easte reduction are of hih concern for many bi banks. 5reenbacks or environmentally responsible banks do not only improve their oEn standards butalso a:ect socially responsible behavior of other business.
Ban%laesh Banks /arlier Initiatives:
## is Eell aEare of the environmental deradation situation as mentioned above and hasalready iven time to time directions to all scheduled banks. /ommercial #anks are noErequired to ensure necessary measures to protect environmental pollution Ehile Fnancina neE pro6ect or providin Eorkin capital to the eistin enterprises. #anks have beenadvised to facilitate their clients Eith utmost care in openin 7etter of /redit +7K/0 forinstallation of `uent 4reatment 8lant+480 in the industrial units. #anks have beenadvised to Fnance in Solar nery, #io$as, 48 and ybrid o:man (iln +(0 inbrick Feld under reFnance proramme of ##. " comprehensive uidelines on /orporateSocial esponsibility +/S0 has been issued Ehere banks have been asked to concentratehard on linkin /S at their hihest corporate level for inrainin environmentally andsocially responsible practices and enain Eith borroEers in scrutiny of theenvironmental and social impacts. #anks have been brouht under the purvieE of$commerce Eith a vieE to providin the customers Eith online$bankin facilitiescoverin payments of utility bills, money transfer and transactions in local currencythrouh internet as Eell. /onsiderin the adverse e:ects of /limate /hane, banks havebeen advised to be cautious about the adverse impact of natural calamities and encouraethe farmers to cultivate salinity resistant crops in the salty areas, Eater resistant crops inthe Eater locked and Uood prone areas, drouht resistant crops in the drouht proneareas, usin surface Eater instead of underround Eater for irriation and also usinoranic fertili)er, insecticides by natural means instead of usin chemical fertili)er andpesticides.
Ao)tin% *reen Bankin% Poli#":
JoE it is the hih time for the banks to adopt a comprehensive 5reen #ankin 8olicy ina formal and structured manner in line Eith lobal norms so as to protect environmentalderadation and ensure sustainable bankin practices.With a vieE to developin reen bankin practices in the country, an indicative 5reen#ankin 8olicy and Stratey frameEork has been developed for the banks in thefolloEin manner%
5reen #ankin 8olicy needs to be covered throuh time fr